Seoul: South Korea’s Hyundai Motor, the world’s fifth-biggest automaker, aims to boost vehicle sales by 10% this year, but growth is seen easing from 2010’s 24% expansion due to an uncertain global economic outlook.
Hyundai shares rose as much as 1.4%, while shares in affiliate Kia Motors jumped about 1.6%, out performing a gain of 0.7% in the benchmark KOSPI, with Hyundai expected to outperform other car makers this year.
“Hyundai Motor Group’s target appears to be conservative and fully achievable,” Tong Yang Securities analyst Ahn Sang-jun said.
“Sales growth will be slowing because of a high base effect during the 2009 downturn, but Hyundai will still outperform the market, which is expected to grow 7% this year led by China and the United States.”
Hyundai Motor Group said on Monday it would target sales of 6.33 million cars in 2011, up 10% from 5.75 million units sold in 2010.
The global auto industry showed a solid rebound until the first half of 2010 from the industry’s worst ever downturn, but has started losing steam because of the euro zone debt crisis and as the US economy struggles with weak consumer spending.
China, a major bright spot, is expected to face slower growth after the end of tax incentives for small cars starting this month, although its growth is expected to remain relatively high compared with mature markets.
Still, analysts say that Hyundai, the world’s No.5 auto maker along with affiliate Kia and one of the top performers during the crisis and sales slump that followed, should continue to outperform its peers and further gain market share, driven by new models and its strength in compact cars.
Hyundai did not give a breakdown of Hyundai and Kia sales and is due to report detailed December sales results later in the day.
Hyundai Motor gained market share in the United States last year, helped by strong sales of its Sonata mid-sized sedan, its best-selling model in America, while its new Avante compact showed a solid performance in the home market.
Automakers are due to report December US car sales on Tuesday and analysts expect December to be the third straight month that US auto sales held above 12 million vehicles on an annualized basis.
Limited production capacity is likely to keep Hyundai Motor from boosting output sharply, analysts said.
Risks also remain over Hyundai Motor Group’s expansion into the construction sector as it seeks to acquire Hyundai Engineering & Construction for $4.4 billion after shareholders of South Korea’s top builder scrapped a sales deal with rival Hyundai Group.
Hyundai shares rose 43% last year and Kia jumped 152%, easily beating a 22% gain in the wider market.